Argentina: Doing Business In Argentina 2016

A. FOREIGN INVESTMENT LAW

Foreign investors enjoy the same rights and have the same duties
as domestic investors when investing in financial or productive
activities.

Generally, Argentine Law does not set any restrictions or
prohibitions on foreign investments. Where there are no
restrictions, no prior government approval is required beyond that
applicable to any domestic or foreign investor in each activity.
Certain industries (e.g., banking, media) do require reciprocity as
a condition for foreigners to invest. In certain other industries
(publishing, internet and related) foreign companies cannot own
more than 30% of the stock of a company. Rural land can be owned by
foreigners although some restrictions and limitations apply for
certain areas. Foreigners can own land in bordering zones subject
to prior approval.

Investments may be made in the form of: (i) foreign currency;
(ii) capital assets; (iii) profits from other investments; (iv)
repatriable capital resulting from other investments made in the
country; (v) capitalization of foreign credits; (vi) intangible
assets; and (vii) other forms acceptable to the competent
authorities.

B. TRANSFER OF TECHNOLOGY

1. Scope of the Transfer of Technology Law

The Transfer of Technology Law governs agreements that provide
for the transfer, assignment or licensing of technology or
trademarks by foreign-domiciled persons to Argentine-domiciled
persons. Executive Order No. 580/81 defines "Technology"
as patents, utility models and designs, and any technical knowledge
applicable to the manufacture of a product or rendering of a
service. The following could not be construed as technology:

Acquisition of products

Technical or consulting services,
know-how licenses, including those pertaining to information,
knowledge or application methods in financial, commercial, legal,
marketing, or sales areas and, in general, any other delivery or
rendering of service that does not evidence clearly and
specifically the effective incorporation of technical knowledge
directly applied to the productive activity of the local
contractor

License to use software or software
updates

Services involving repairs,
supervision of repairs, maintenance, and setup of plants or
machineries, excluding the local contractor's personnel
training

In general, all activities that
directly represent the hiring of tasks related to the current
operation of the local contractor.

2. Agreements Between Related Parties

License agreements executed by a domestic licensee and a related
foreign licensor need not be approved by, and registered with, the
Instituto Nacional de la Propiedad Industrial (National
Institute of Industrial Property) (the "INPI"). However,
failure to register them has adverse tax consequences (see
chapter4).

These agreements must be entered into "regular or usual
market practices between unrelated parties" and the
consideration must be supported by a transfer pricing study.

3. Agreements Between Unrelated Parties

Agreements between unrelated parties are registered with the
INPI only for statistical and tax purposes. No specific conditions
are established for them.

4. Tax Treatment of Payments

Generally speaking, payments to foreign beneficiaries arising
from transfer of technology agreements are considered as
Argentine-source income and thus subject to Argentine taxation. The
applicable rates may vary, depending on whether the agreement is
registered with the INPI and on some other reasons (e.g., the way
in which the service is being rendered or distributed).

The lack of registration of an agreement between related
companies or unrelated parties with the INPI does not adversely
affect its validity. However, if the agreement is not registered:
(i) the licensee may not deduct the amount paid to the licensor for
income tax purposes, and (ii) all payments made to the licensor
deriving from a non-registered agreement are subject to a 31.5%
income tax withholding. Conversely, registered agreements are
subject to a lower rate, ranging from 21% to 28%, according to the
kind of technology being transferred and the method used for
estimating the remuneration or service. These rates may be
substantially reduced if an agreement to avoid double taxation is
applicable. Argentina has entered into these agreements with
several countries (please see Section G, 5, (e), below).

C. INTELLECTUAL PROPERTY

1. Patents and Utility Models

Patents and Utility Models are protected by Argentine Law.

The salient points of the legislation are as follows:

Any individual or legal entity,
either national or foreign, is entitled to obtain patent and/or
utility model certificates.

"Invention" is defined as
any patentable device or process created by an independent effort,
capable of transforming matter or energy for the benefit of
man.

Inventions of products and processes
are patentable if they are novel, involve an inventive activity and
are capable of industrial application. While absolute novelty is
required, the disclosure of the invention at an exhibition or in a
publication or other means of communication within one year prior
to the patent application date or priority date shall not affect
its novelty.

Patents are granted for a term of 20
years from the application filing date.

The law grants a 10-year protection
term for Utility Models from the application filing date, and such
term may not be extended.

Patents and Utility Models are
subject to annuities.

Pharmaceutical products are subject
of protection effective October 2000.

Inventions made by an employee in the
course of his or her employment contract shall belong to the
employer, provided the purpose of such contract or relationship
involves inventive activities, either partially or totally.

After 3 or 4 years, depending on the
circumstances, any person is entitled to request from INPI an
authorization to use the invention without the patentee's
authorization (compulsory license) if it has never been used or if
its use has been interrupted for more than one year, except in case
of force majeure or lack of effective preliminary steps for using
the patented invention.

The law imposes civil and criminal
penalties, such as fines and imprisonment, on anyone who infringes
a patent or a patentee's rights, as well as remedies to stop
the infringement, such as seizure, inventory and attachment of the
forged objects.

2. Industrial Models and Designs

Industrial Models and Designs are ruled by Law No. 16,478, and
refer to the shapes or configuration of elements given or applied
to an industrial product that is substantially decorative or
ornamental.

The protection term is five years, beginning from the date of
deposit, which may be extended to two consecutive periods at the
owner's request.

The law provides for the renewal and transfer of industrial
designs, cancellation actions, and civil and criminal actions
arising from infringement of owner's rights.

3. Trademarks

Law No. 22,362 protects both trademarks and service marks.

Ownership of a trademark and the right to its exclusive use are
acquired by registration. A legitimate interest is only required to
become the owner of a trademark and to exercise the right to use
it.

Before registration, a trademark is published for purposes of
opposition by third parties and is subject to an initial
examination by the Trademark Office examiners.

The protection term of a registered trademark is 10 years from
the date of registration. It may be renewed indefinitely for
periods of 10 years, provided the trademark is used within the five
years preceding each expiration date.

Prominent trademarks have been granted special protection by law
and court decisions. A trademark is null and void when it is
registered by anyone who, when applying for registration, knew or
should have known that it belonged to a third party.

Trademark infringement is punishable with a fine or
imprisonment.

The Law also prescribes provisional remedies or preliminary
injunctions to investigate the infringement of a trademark and
identify its authors.

4. Author's Right (Copyright)

Law No. 11,723, as amended, protects all scientific, literary,
artistic or didactic works, expressly including computer software
(source and object), data compilations and other materials
irrespective of their means of reproduction.

Foreign works (works first published in foreign countries,
regardless of the nationality of the author), when they are made in
countries that recognize copyright, are protected.

As a general rule, copyright is for a term consisting of the
life of the author, and 70 years from the first day of January
subsequent to his or her death. The last rule also applies to
posthumous work. For joint works, the term becomes effective from
the first day of January of the year following the death of the
last author. Anonymous works published by legal entities are
protected for 50 years from their publication dates. With regard to
cinematographic work, the copyright is protected for 50 years from
the date of the last author's death. (The law considers the
following individuals as authors unless otherwise agreed:
scriptwriter, producer, director and soundtrack composer.)
Copyrights to photographic work last 20 years from the date the
work is first published.

The term of copyright protection for foreign works varies,
depending on the international treaty to which both the country of
origin of the foreign work and the Argentine Republic are parties.
However, the applicable term will not be longer than the one
granted by Argentine law.

All Argentine works must be registered with the
Dirección Nacional del Derecho de Autor (National
Copyright Office) the secure entitlement

Law No. 11,723 also provides for injunctions and criminal
sanctions for copyright infringement.

Argentina is a member of both the World Intellectual Property
Organization and the World Trade Organization. In addition,
Argentina is a party to the most relevant international treaties
concerning intellectual property:

5. Industrial and Trade Secrets

Law No. 24,766 establishes that, under certain conditions, any
person who legitimately owns some information may bring legal
action to prevent the disclosure of such information by any third
party or to prevent it from being acquired and/or used by any third
party, and to claim compensation for the damages caused.

Trade secrets are also protected by the provisions of the
GATT/TRIPS Agreement, as approved by argentine law and by the
Criminal Code.

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